Understanding GDP & Economic Indicators - Edubirdie

University:
California State University, Northridge
Course:
ECON 160 | Principles of Microeconomics
Academic year:

2023
Views:

384

Pages:

2
Author:

Mahmoud M.

Microeconomics GDP: The market value of all goods and services produced by a country during a period. Your personal success is affected by: GDP - GDP per capita leads to a high standard of living of people unemployment - Impact on job search inflation - Average increase in price and decrease in the value of money interest rate Macroeconomics introduction: ● Help to know the options ● Inform voters to vote for politicians that affect the economy Normal GDP: Value of production at current prices The GDP cost of all final goods produced in a country. GDP = flow, quantity per unit time Stock = constant time quantity Real GDP: Value of output using a constant value in the base year. Difference between normal and real GDP over time: Real GDP: changes in price and quantity Real GDP: only quantity changes Real GDP per capita: best measure of standard of living final goods or services: - Consumption Consumer Intermediate goods or services: - Goods from other markets Value added: ● Cost of production - value of intermediate goods of other enterprises Value added equals twice the final product and intermediate product Value of final products and services = value added Value of final goods and services (GDP) = Revenue from Inputs GDP Circular Flows can be calculated using: Total Expenditure = Total Revenue Final Spend = Payments to Input Owners Expanded Circular Flow of Expenditure: C = Consumption Spend 4 Enterprise4 Investment = ROW Canada Export Spend IM = Canada ROW Import Spend Y = Revenue C + I + G + X-IM = Y (Gross Income = Gross Income Potential GDP: ● Real GDP when all inputs are fully used, land, capital, resources ● Target of working on short-term economy Capital GDP per capita: - Short-term maximum standard of living for the economy

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